Monetary and nonmonetary valuation of ecosystem services

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• Monetary (and non-monetary) valuation of
  ecosystem services

Ken Bagstad Gund Institute
for Ecological Economics
University of Vermont
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Ecosystem service valuation

• Costanza et al. 1997 globally, ecosystems
  contribute 33 trillion/yr in value to humanity
• Loss of services when land is converted (urban
  sprawl, agriculture), wetland loss, changes
  through logging and forest succession
• While there may be no right way to value a
  forest or river, there is a wrong way, which is
  to give it no value at all - Paul Hawken

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Concept of rivalness
A good or service is RIVAL if by MY consuming it,
means that YOU cant Example Food A good or
service is NONRIVAL if MY consuming it doesnt
prevent YOU from being able to consume
it Example A stable climate
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Concept of excludability
A good or service is EXCLUDABLE if you can be
legally prevented from using it Example A park
with an entrance fee A good or service is
NONEXCLUDABLE if you cant legally be prevented
from using it Example The waste absorption
capacity of the atmosphere
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Why is it hard to value ecosystem services?
Adapted from J. Farley
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Why do we degrade natural capital?

• Who benefits and who loses?
• Protect the ecosystem
• Winners the public (all of us)
• Losers landowners who could make money with
  extractive use
• Degrade the ecosystem
• Winners private property owner(s)
• Losers the public (all of us)
• A solution legal rights to ecosystems and their
  services (propertization, not privatization)

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From ecosystems to value
De Groot et al. 2002
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• Ecosystem service types

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Valuation methods
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Methods for specific services
Farber et al. 2006
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Steps to spatial ecosystem service valuation
(Troy and Wilson 2006)

• 1. Define study area
• 2. Develop land cover typology
• 3. Lit search and analysis
• 4. Mapping
• 5. Total value calculation
• 6. Geographic summaries
• 7. Scenario analysis